New Environmental Ruling With Broad Implications for the US Pipeline Industry

This week the United States witnessed a sea change in the policy of the US government toward pipeline construction.

Indeed, President Trump's program to rebuild America's infrastructure suffered a big blow when a federal court ruled that regulators must examine the pipeline's impact on global climate change before granting approval.

While the D.C. Circuit Court of Appeals was referring to the Southeast Market Pipelines Project, running along most of the eastern seaboard of the country, most legal experts believe the ruling will have broad application in the pipeline industry, establishing a precedent that any future pipeline project must be mindful of.

In particular the court said the Federal Energy Regulatory Commission did not properly evaluate the effects of greenhouse gas emissions from the natural gas shipped by the pipeline. So going forward this ruling ensures -- at the very least -- pipeline projects will require more time before completion, if they are completed at all.

"It's a very significant victory for environmentalists because FERC has had a long history of rubber stamping these pipelines, but I hope this decision will spur it to examine its responsibilities more closely when it makes decisions," said Elly Benson, an attorney with the Sierra Club, the plaintiff in the lawsuit.

Additional pipeline capacity is sorely needed in the eastern United States, given the boom in fracked natural gas and the need for this gas inside the country and abroad. The Marcellus and Utica shale fields in the Appalachian region are presently affected by the paucity of pipelines.

As expected the consortium of companies behind the Southeast Market Pipeline Project will be withholding comment: "While we won't comment further on pending litigation, we do not anticipate that the court's decision will have an adverse effect Sabal Trail's operations at this time," said Andrea Grover, a spokeswoman for the consortium of companies behind the project.